In this new episode of the Hardware Podcast, David Cranor and I talk with Rob Coneybeer, managing director and co-founder of Shasta Ventures, one of the critical first investors in hardware startups including Nest, Fetch Robotics, and Turo (formerly RelayRides).

Discussion points:

Why Nest looked like an appealing investment back in 2010

Coneybeer’s focus on virtual reality and robotics as the next big things for hardware startups.

Why it’s essential for hardware startups to have a long-term plan for improving products after they’re in place, and the importance of over-the-air software updates.

The consumer psychology of selling a compelling hardware product, and when to aim for high price and high value. “People are willing to spend money when there’s something that’s really revolutionary,” says Coneybeer.

The current state of venture capital investments in hardware startups. While raising later rounds is becoming more difficult, Coneybeer says: “the most interesting, innovative hardware companies will always find capital.”

Hardware startups are starting to look like software startups: a lean company can bring a reasonably simple piece of consumer electronics to market for a few hundred thousand dollars.

Behind that low figure are technological advances (like 3D printing and CNC machining that make prototyping faster and easier) as well as organizational advances — in particular, hardware incubators and accelerators that offer funding and help founders work their way through the product development process.

Forrest and DiResta take us into the trenches on a wide range of topics, including design for manufacture (DFM), idea validation, crowdfunding, cost control, marketing, packaging, and shipping. It’s a quick tour of the tricky areas of expertise that hardware founders need to develop. Read more…

Hardware is getting more accessible, which makes hardware startups more appealing. A small team can develop a viable prototype for a simple product on a few hundred thousand dollars, and even tricky problems like autonomous cars are within the reach of startups.

Incubators and accelerators like Highway1, Lemnos, and HAX have played an important role in making hardware accessible; they help their portfolio companies work through the tricky engineering, manufacturing, and marketing problems that software startups don’t have to deal with.

In our new episode of the Solid Podcast, David Cranor and I have a wide-ranging discussion with Ben Einstein, co-founder and managing director of Bolt, one of the leading hardware startup accelerators.

Einstein, who spoke at Solid 2015 in California, talks about the importance of hardware marketing and customer development, including branding, crowdfunding, and virality (which is “much more possible with hardware now than it was 10 years ago,” he says). Read more…

A free compilation of chapter excerpts from our IoT library highlights the approachable complexity of hardware.

Over the last few years, we’ve seen an astonishing change in what it takes to build a hardware business. Hardware remains hard — executing it well requires technical and marketing expertise in several fields — but the barriers that startups must cross have been lowered considerably.

That change has come about as a result of several changes in the way the market approaches hardware.

Customers, whether consumers or businesses, have become aware of what hardware and connected devices can do for them. The Internet of Things means more than connected refrigerators now. For consumers, it represents desirable products like the NEST thermostat and Apple Watch. For managers, it represents the highest standards of informed decision-making and operational efficiency in everything from delivery fleets to heavy machines to simple design-driven data.

Connecting with those customers has become easier. Startups can sell directly to niche consumers through online channels with the help of Etsy, Tindie, and ShopLocket, which are vastly easier to deal with than big-box retailers. These platforms also return rapid market feedback and offer ways for companies to connect with their consumers and build communities without intermediaries.

Funding has become available through new mechanisms at every stage. Crowdfunding helps entrepreneurs test their ideas in the marketplace and raise enough money for early development. Venture capitalists, impressed by recent exits and aware of the vast green fields awaiting the Internet of Things, are willing to invest. Supply-chain managers like PCH are willing to take equity stakes in return for invoice financing, addressing a critical cash-flow challenge that can be a big barrier to startups looking to have products manufactured in large quantities.

The 3Doodler is tapping a new market: People who want a 3D printer but can't afford one.

The 3Doodler is a 3D printer, but it’s a pen. This takes 3D printing and turns it on its head.

In fact the 3Doodler rejects quite a lot of what most people would consider necessary for it to be called a 3D printer. There is no three-axis control. There is no software. You can’t download a design and print an object. It strips 3D printing back to basics.

What there is, what it allows you to do, is make things. This is the history of printing going in reverse. It’s as if Gutenberg’s press was invented first, and then somebody came along afterwards and invented the fountain pen. Read more…